Sylva praises UTM Offshore, partners on Nigeria’s First Floating LNG facility
Nigeria’s quest for energy transition received a huge boost on Wednesday when an indigenous firm, UTM Offshore Limited signed agreements with three technical partners, Kellogg Brown and Root (KBR) UK, Japan Gas Corporation (JGC) and TechnipEnergies Limited, for the commencement of the Front End Engineering Design (FEED) for Nigeria’s first Floating Liquefied Natural Gas (FLNG) facility. The Agreements were signed at a brief but colourful event at the the Hilton Park Lane, London, UK.
The FEED contract with the three firms essentially entails conducting for UTM Offshore Limited,various studies to figure out technical issues and estimate rough investment cost for the FLNG facility prior to the Engineering, Procurement and Construction (EPC) phase of the project. The time line for this phase of the the FLNG project is 10 months.
The FEED contract signing is a follow up to the successful execution of the pre-FEED agreement between UTM Offshore Limited with JGC, a leading International Engineering Design, Procurement and Construction firm. The Pre-FEED scope was completed within four months from commencement date. KBR provided due diligence on the JGC scope by conducting a third-party review of all deliverables from JGC during the Pre-FEED.
UTM Offshore Limited entered into the pre-FEED agreement with JGC and KBR in May 2021.
Speaking at the FEED contract signing event, the Minister of State for Petroleum Resources, Chief Timipre Sylva applauded the pioneering efforts of Mr. Julius Rone and UTM Offshore Limited and said the Federal Government will continue to support and create the enabling environment for business investments in the country, especially in the area of gas development.
“The PIA is already improving the petroleum industry’s reputation, paving the way for new investments, creating jobs, supporting the economic diversification agenda and strengthening Nigeria’s ability to fulfil the world’s expanding energy demand,” he said.
The Minister reiterated the Federal Government of Nigeria’sdetermination to leverage on natural gas as the nation’s transition fuel with Floating LNG Technology as the game changer. “As a developing nation, we believe that affordable, accessible and reliable energy will continue to be essential to sustaining and powering our growing economy, and to lift millions out of poverty,” he said adding that only gas can help to bridge the current energy gaps in the country.
While stressing the significance of innovation, technology and policy as key drivers of change in the energy sector, Sylva again maintained that “no doubt, gas remains the solution to ensuring our energy security, economic competitiveness, and a reduction of greenhouse gas emissions. We have already proclaimed that gas is our transition fuel and a destination fuel, and we anticipate that it will be a major component of our energy mix by the year 2060”.
The minister noted that the UTM FLNG will target the processing of associated gas currently flared in order to cut carbon emissions and monetise additional reserves for the domestic and global markets, which aligns with the Federal Government’s gas flare commercialization program (The NGFCP) and the decade of gas agenda.
“There are generous incentives to enable development, distribution, penetration, and utilisation of gas,” Sylva said adding that “this is why the UTM Offshore project will involve the development and financing of a 1.52 million tonnes per annum (MTPA) FLNG facility with a capacity to process 176 million standard cubic feet of natural gas per day and condensate.”
At the signing ceremony, the Managing Director and Chief Executive Officer of UTM Offshore Limited, Mr. Julius Rone underscored the fact that like most other nations of the world, Nigeria is keen on, and working assiduously towards achieving energy transition. He said Nigeria’s energy transition necessarily should start with moving from huge dependence on crude oil to gas. “Like I have said in several fora, for us in Africa, especially Nigeria, energy transition is steeped in harnessing our abundant gas resources. At UTM Offshore, we completely agree withPresident Muhammadu Buhari that given Nigeria’s potential of about 600 trillion cubic feet of gas, the commodity has the enormous potential to diversify our country’s economy. We also agree that the rising global demand for cleaner energy sources has offered Nigeria an opportunity to exploit gas resources for the good of the country,” Mr. Rone said.
“We thank the President for making gas development and utilization a national priority to stimulate economic growth, further improve Nigeria’s energy mix, drive investments, and provide the much-needed jobs for our citizens in the country,” he added.
Rone disclosed that UTM Offshore is impressed with JGC’s handling of the pre-FEED component of the FLNG project hence the resolve the reengage the firm for the main FEED Phase.
“JGC Corporation came highly recommended, given the several similar projects the firm had undertaken across the world. Indeed, of the total number of five FLNGs in the world today, JGC Corporation was involved in the design, construction and commissioning of three. We do not take for granted the fact that what UTM Offshore Limited is doing is largely novel. It is the first of its kind in Nigeria and we are very excited about this trail-blazing project; the opportunity to build from the scratch, the first Floating Liquefied Natural Gas Facility in country. That is why we cannot afford to settle for less hence the reason we contracted JGC Corporation, clearly one of the leading firms in the LNG Construction sector in the world, to provide both the Pre-Front End Engineering Design Services and the main FEED for this first Floating LNG facility in Nigeria,” the UTM Offshore Chief Executive enthused.
“Today, we are here to consummate the very fantastic working relationship between UTM FLNG, KBR, JGC, Technip Energies Ltd and Cryogas Equipment Private Limited as we sign the main Front End Engineering Design (FEED) for Nigeria’s first Floating Liquefied Natural Gas Facility,” he added
Speaking in the same regard, the President of African Export Import Bank (AfreximBank), Professor Benedict Okay Oramah, lauded the tenacious and transparent pursuit of the FLNG project by Mr. Julius Rone and his team members at UTM Offshore Limited and pledged the full backing of the Bank for the FLNG Project.
“Nigeria is a gas zone; the country holds the highest reserve of gas in Africa, but for years, we were burning our wealth through gas flaring. It is a good thing that President Muhammadu Buhari decided to press the pause button so that Nigeria can optimize the utilization of the country’s gas resources to enhance the lot of the nation, create wealth for the people from what is abundant in the country,” the President of AfreximBank remarked.
Professor Oramah however noted that the intervention of President Buhari in optimizing the utilization of Nigeria’s gas resources came at a time when the traditional (multinational)investors in oil gas initiatives had decided to stop funding oil and gas operations in Africa due to climate change. “It is now left for us, as Africans to find ways to convert our gas resources to wealth. We are not going to keep waiting for multinationals tohelp us harness our wealth. AfreximBank is supporting the FLNG project in Nigeria because we have seen that Mr. Julius Rone is serious. He (Rone) did not hesitate to put his leg in the water, so AfreximBank did not hesitate to jump into the lake with him. AfreximBank will continue to support the UTM FLNG project until completion,” Prof. Oramah disclosed.
In December 2021 UTM Offshore Limited and AfreximBanksigned a $5bn MoU for the financing of the UTM FLNG.
“The UTM FLNG is one of the projects AfreximBank is very proud of; just like the Dangote refinery. We are proud to be associated with these two projects in Nigeria. FLNG is a huge project and it is not for traders; you need an Entrepreneur in the strict sense of the word. This is a project that will take off in 2026 but Mr. Julius Rone has shown that he is willing and able to pay the price and wait for almost a decade to start reaping from the fruit of his labour. This is remarkable. We will work and walk with Julius Rone on this project. In fact, Nigeria needs more dogged Entrepreneurs like Julius Rone and I commend Mr. President for recently conferring Julius Rone with the national award of OFR. He truly deserves the honour,” the AfreximBankPresident said.
Also at the London event were the heads of the regulatory authorities in Nigeria’s oil and gas sector – Engr. Simbi Wabote, the Executive Secretary, Nigeria Content Development and Monitoring Board (NCDMB); Engr. Gbenga Komolafe, the Chief Executive Officer Nigerian Upstream Petroleum Regulatory Commission and Engr. Farouk Ahmed, the Chief Executive Officer, Nigeria Midstream and Downstream Petroleum Regulatory Commission (NMDPRA). All the regulatory Chiefs commended the tenacity of Mr. Rone and his team a pledged their continuing support for the UTM FLNG Project.
The contract signing event was spiced up by the very firmcommitments by the UTM FLNG’s technical partners – the President of JGC Holdings, Mr. Tadashi Ishizuka; the Chief Operating Officer of Technip Energies Limited, Mr. Marco Villa; the Vice President KBR, Mr. Paul Baillie and Mr. Steve Brann, the Head of LNG Operations at Vitol, to deploy their best minds and technologies to actualize Nigeria’s first Floating Liquefied Natural Gas facility being developed by UTM Offshore limited.
UTM Offshore Limited is pioneering the development of the FLNG facility in collaboration with LNG Investment Management Services (LIMS), a subsidiary of Nigeria National Petroleum Corporation PLC (NNPC Limited).
The facility, a newly built vessel, will receive gas feedstock from an existing offshore facility, treat it to required LNG standard, liquefy the gas, store the LNG and offload to LNG carriers.
When completed, the floating LNG shall have an LNG production capacity of 1.2 mmtpa, Turret and Mooring System, Gas pre-treatment modules, LNG production modules, living quarters, self-contained power generation and utilities as well as capacities for LNG storage and offloading.